Good morning! Wendy Cox here in Vancouver.
Colette Griffiths and Chris Allen wanted to turn an aging corner story into a specialty grocery store/cafe/deli in a gentrified Vancouver neighbourhood at the intersection of two bike routes. Processing time for permits, according to the City of Vancouver, is supposed to be about five weeks.
It took five months. Among the holdups: one city employee wanted a list of the groceries they’d sell, another complained that plans for the space didn’t “feel” like a grocery store.
Not far away, on Main Street, the Mouse Trap cheese shop was forced to close after only four days of business. The owners had waited so long for its permits, they ran out of money.
Another eager business owner, an experienced Whistler restaurateur, spent $300,000 trying to get the permits for a new eatery at Main and 16th. He was blocked by city staff who said he needed a significant number of parking spots – an impossibility on a site where the building covered almost every square foot of the lot. He gave up.
Elsa Biernat wanted to open a children’s clothing store in Kitsilano and in December, 2016, figured that the permits would take a couple weeks because all she needed was a new sign, some extra electrical outlets, a room divider and shelving and rods for hanging clothes. It took until the following March for her to open. City officials had declared her sign slightly larger than the rules allowed and she needed an engineer’s drawing to spell out exactly what the room divider would look like.
As Frances Bula reports this weekend, being a small-business owner in the Vancouver region these days requires patience, stamina and pockets deep enough to sustain paying rents for a space that sits empty until the permitting process is complete – a process that could take many months.
And that’s on top of skyrocketing property taxes.
The city maintains that its waiting list for permits is 5.4 weeks, a number that defies the experiences of many small-business owners. But a city spokesman told Frances that the delays can mostly be blamed on the applicants themselves.
Mark Greenfield, director of operations, development, buildings and licensing for the city, looked at permits that are taking longer than seven weeks to be processed – a figure that’s still longer than the 5.4 weeks that the city says in its app is standard. Mr. Greenfield said about half of the delays are a result of city officials awaiting calls to book inspections, another 14 per cent are due to a failure to respond to questions, and about six per cent of applicants haven’t paid their fees.
But even taking into account those issues, about one third of outstanding permits are languishing for longer than seven weeks.
“It used to be that a really big grocery store or a restaurant, that would be four months,” says Sean Ogilvie, a vice-president at the commercial broker Lee & Associates where he is described as someone with a track record in dealing with multiple or long-term vacancy issues. “Now it’s six months just for the permit.
"It pains me because people don’t realize what a problem it is.”
All of that is on top of taxes that have become crippling to even some of the region’s most established businesses. This week, Alexandra Gill reported that John Bishop, one of Canada’s most respected chefs, will close his eponymous Kitsilano eatery after 35 years because the taxes on his property have become unmanageable.
He is the most high-profile business owner to pack it in as a result of a tax structure that has prompted mayors in the Lower Mainland to beg the province for relief. Frances explained earlier this week: Taxes on commercial properties are assessed based on sales of nearby properties with similar characteristics. But those properties have experienced an explosion in value due to speculative buying or rezoning as part of city policies to increase density to deal with the housing crisis.
So if a two-storey property is rezoned to accommodate a several-storey condo complex, it is assessed that way, even if that potential building doesn’t actually exist. To add to the burden, the taxes levied are calculated at the business rate, which is almost four times the residential rate.
Last week, the B.C. government offered what it said was relief. But the solution would have involved cities having to make decisions on a case-by-case basis about which businesses might qualify. The mayors rejected it as completely unworkable.
Meantime, the brown paper covering the windows of businesses in the process of shutting down or opening up anew have become a conspicuous part of the landscape on some of Vancouver’s most prominent neighbourhood shopping streets, leaving the owners of the shops that are open to worry about the vibe that is sending customers.
What’s happening in Vancouver is in some ways indicative of problems that are inherent in how property taxes work, sending bills to people not based on how much income they have but the relative value of their properties.
In the Vancouver region, the problem is happening during boom times, when increasing values and feverish development increases values – and taxes – for people who have nothing to do with the property frenzy.
In Calgary, it’s in some ways the opposite end of the same problem. A collapsing downtown office market has caused a shift in taxes to businesses outside the core. They now make up a larger share of the overall tax role in the city.
Businesses in neighbourhoods like Inglewood saw their tax bills skyrocket by two or three times (or more) in a single year, and the city faced so much pressure to intervene that city council last year slashed the budget by tens of millions of dollars to blunt the impact on businesses. They also increased the burden on residential owners, but it’s not clear if even that is sustainable unless the economy – and the city’s downtown – recovers.
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here. This is a new project and we’ll be experimenting as we go, so let us know what you think.
Around the West:
ALBERTA BUDGET: Alberta’s Premier says the economic fallout from the new coronavirus could blow the United Conservative Party government’s target to balance the budget in two years. Jason Kenney says the outbreak of COVID-19 has caused global uncertainty that wasn’t apparent even just a few weeks ago, and that could impact the province’s balanced-budget timeline. Oil prices in particular have tumbled in recent weeks to US$42 a barrel for West Texas Intermediate – far below the level Alberta needs to keep its budget on track.
CORONAVIRUS: British Columbia has identified Canada’s first-known case of community transmission of the novel coronavirus, marking a pivotal moment in the country’s battle against the outbreak. The patient, a woman in her 50s, has not recently travelled and has no known contacts with any other known cases of COVID-19. She was diagnosed while being screened for influenza at a public-health laboratory.
On Friday, B.C. announced its coronavirus strategy. The plan provides for redeploying health-care workers if needed to handle coronavirus cases, guiding employers through extended absences and offering supports for grocery stores, schools and public transportation.
TRUCKING SAFETY: Families whose relatives have been killed in crashes involving transport trucks are forming a non-profit organization to push for graduated licensing for new big-rig drivers and to designate trucking as a skilled trade so new operators receive more training before hitting the road. Safe Roads wants Canada to disband its patchwork training system in favour of a national program.
TRANS MOUNTAIN: The Supreme Court of Canada has declined to hear five challenges related to the Trans Mountain pipeline expansion, removing another legal hurdle for the project. As usual, the court did not give reasons for its decisions. But the legal challenges are not over: also on Thursday, the Tsleil-Waututh Nation announced that it would appeal a February Federal Court of Appeal decision that upheld government approval.
WET’SUWET’EN: After nearly a month, the solidarity protest for the Wet’suwet’en hereditary chiefs on the steps of the B.C. Legislature has begun to wind down. This happened after five demonstrators were arrested for mischief after refusing to leave following a meeting with the province’s Minister of Indigenous Relations and Reconciliation.
CARBON TAX: The Alberta government plans to increase its carbon tax on industrial emitters alongside the federal requirements to $50 per tonne by 2022. The province introduced a $30 per tonne levy that was approved by the federal government last year, but the government had not committed to increasing it in future years. Premier Jason Kenney now confirms that they will increase it by $10 per year for the next two years. The industrial tax, which largely targets the province’s oil industry, is not related to the contentious consumer tax on gasoline and other fuels, which Alberta is challenging in court.
MANITOBA CARBON TAX: Manitoba will enact a flat $25-per-tonne carbon tax on July 1. It is to be offset by a simultaneous one-point cut in the provincial sales tax to six per cent. It was not immediately clear whether Prime Minister Justin Trudeau’s Liberal government will agree to Pallister’s plan.
INTERNATIONAL WOMEN’S DAY: With International Women’s Day coming up, our food writer, Dan Clapson looked at events in Western Canada that celebrate women in the culinary world. For example, in the Okanagan, chef and popup-event extraordinaire Aman Dosanj is preparing for her fourth-annual International Women’s Day event: “I love having an underdog, like myself, on the lineup, as well as people from different culinary backgrounds.”
UNFOUNDED: Last fall, the RCMP disclosed that almost 40 per cent of sexual-assault complaints made to the Kelowna detachment were dismissed as unfounded, a rate three times higher than the country’s average. An internal review found that staff coding errors with the Kelowna detachment are to blame for the high number, and that new training for staff has been launched to ensure that such a situation does not occur again.
CANNABIS: There’s a shop in East Vancouver that has been flouting cannabis laws since it opened 23 years ago. But now the B.C. Compassion Club Society – which offers low-cost products to people with medical marijuana prescriptions – is looking to get a licence to end the existential threat that has always hung over it.
CAROLE JAMES: B.C. Finance Minister Carole James has been diagnosed with Parkinson’s disease, but plans to carry on with the political duties that have made her one of the most prominent figures in the provincial government. Ms. James, however, did say that the diagnosis will end her political career and that she will not be seeking re-election. “I wanted to get the news out, to share it with the public to make sure people knew what I was experiencing, but, really, it will be back to work next week," she said on Thursday.
ALBERTA WAITING TIMES: Alberta intends to funnel patients in major cities who need minor surgeries to private clinics and hospitals in smaller communities as part of the government’s bid to cut waiting times for more complicated procedures. The plan earmarks $100-million for renovating hospitals, including facilities in rural areas. Alberta expects the spiffed-up buildings, combined with more procedures at private clinics, will increase the number of annual surgeries in the province by 30,000, or 10 per cent, in three years. Doctors performed roughly 293,000 surgeries in Alberta last year.
AIRBNB: A court ruling in Alberta could give condo boards the ability to ban short-term rentals, like Airbnb. The case was over whether these short-term rentals are businesses. Most condominium buildings have bylaws restricting owners from running businesses out of their units.
SUPERVISED DRUG CONSUMPTION SITES: The results of a government study on Alberta's supervised drug consumption sites found that the facilities largely result in an increase in crime and disorder in their neighbourhoods, and that the number of reported overdose reversals is exaggerated. But experts in opioid harm reduction and the Edmonton Police Service are challenging these claims.
CONSERVATIVE LEADERSHIP: Jason Kenney came out on Thursday and endorsed Erin O’Toole for the Conservative Party’s next leader. “The Conservative Party of Canada must choose a leader who is true blue,” Mr. Kenney said.
Peter Schryvers on how to measure Alberta's budget success: "The problem with any performance metrics is that people find unanticipated ways to meet them, often with unintended consequences. Measure call centres on the time they spend on the phone with customers, and they’ll just hang up. Measure surgeons on the success rate of their surgeries and they’ll avoid taking on complex patients. Measure train conductors if they’re on time and they will skip stations, leaving passengers behind. What you measure isn’t always what you get."
Thomas Gunton on Alberta’s energy policy: “The private sector is beginning to realize the need for alternative strategies not based on unrealistic fossil fuel growth assumptions, and Canadian governments need to do the same. The oil boom is over, and it is time to manage a transition to a cleaner energy strategy that does not depend on fossil fuels and the erroneous assumption that the boom will return if only we build another few pipelines or weaken our climate change policies.”
Gary Mason on fair-trade oil: "And yet, if oil is the new tobacco, Mr. Kenney does not seem to be panicked, at least outwardly. Ask him about the grim prognostications for a product that has been the goose that’s laid the golden egg for his province, and he resorts to a now-familiar refrain. Oil ain’t going anywhere soon."
Max Fawcett on the Alberta government possibly spending public money on the oil and gas industry: "But Jason Kenney is no Peter Lougheed, and his United Conservative Party government’s apparent interest in supporting the oil and gas industry has very little in common with the concerns that motivated Mr. Lougheed’s Progressive Conservatives. While the latter was interested in building his province’s economic future, Mr. Kenney simply appears determined to keep its past alive – at almost any cost."
Kelly Cryderman on Jason Kenney's endorsement of Erin O'Toole: "It remains to be seen how much the Kenney endorsement matters, but it’s no small thing. Leadership contenders can count on Alberta votes in a general election regardless of who wins the leadership race, but they still need the home base for money, signatures and volunteers. Mr. O’Toole can now also benefit from the recent campaigns Mr. Kenney has run and won in the province."
Adrienne Tanner on Vancouver possibly holding the Olympics again: “A couple of weeks ago, former Vancouver Organizing Committee CEO John Furlong suggested we make a bid for the 2030 Games. For a second, I thought, perhaps he’s right. The venues are already built and maybe, just maybe, we could pull off a Los Angeles miracle and host the Games without losing our shirts. But times are different now in Vancouver. The Olympics are to a city like that luxury holiday you take when you get a raise – great when you can afford it, but otherwise an extravagance to be avoided.”
Gary Mason on Carole James: “It says everything you need to know about Ms. James that the space in the legislature where she held her news conference was packed, including with many political foes. When she broke the news, with a catch in her throat, even those who’d gone toe-to-toe with Ms. James over the years were wiping tears from their eyes.”